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ANOTE 548R DRIVER
The Confederate Note Case, 86 U.
Notes issued by the Confederate government having become the currency in which contracts were made and business conducted in the insurrectionary states during the recent civil war, and such notes having been designated by general custom as notes for so many "dollars," parol evidence is admissible, where suit is brought to enforce a contract payable in "dollars" and made during the war, to prove the above condition of things being first shown-that the term "dollars," as used in the contract, meant in fact Confederate notes. In the absence of such evidence, the presumption of law would be that by the term "dollars" the lawful currency of the United States was intended. Thorington v. Smith, 8 Wall. The ordinance of North Carolina of declared that all existing contracts solvable in money, whether under seal or not, made after the depreciation of Confederate currency, before the 1st day of May,and then unfulfilled except official bonds, and penal bonds payable to the stateshould "be deemed to have been made with the understanding that they were solvable in money of the value of the said currency;" but at the same time provided that it should be "competent for either of the parties to show, by parol or other relevant testimony, what the understanding was in regard to the kind of currency in which the same were solvable," and that in such case "the true understanding" should regulate the value of the contract.
Held, that the understanding of the parties might be shown from the nature of the transaction and the attendant circumstances as satisfactorily as from the language used, and particularly that it might be shown from the length of time during which the contracts had to run before maturing, and that accordingly when bonds of a railroad company were issued in May,payable at dates varying from seven to thirteen years afterwards, the inference ANote 548R justified that the company intended at the time of issuing them that the bonds should be paid in lawful money instead of Confederate notes.
The interest payable on a bond issued as above-mentioned follows the character of the principal, and is payable in like currency. Usury, as a defense, must be specially pleaded or set up in the answer to entitle ANote 548R to consideration. Page 86 U.
The bonds were payable to the company last above mentioned or bearer, and were secured by a deed of trust of the railroad, buildings, and franchise of the company executed ANote 548R Joseph Wilson and Anderson Mitchell. The deed stipulated that in case the company failed to pay the principal and interest on the bonds as they became due, the trustees should, upon request of the holders ANote 548R the bonds or of their guarantor, proceed to sell the property, or so much thereof as might be necessary, and apply the proceeds of the sale to the payment of the bonds.
The Carolina National Bank, L. Childs, and C. With this request the trustees declined to comply, alleging as a reason that the parties differed as to the amount to be paid.
The above-named holders of the bonds ANote 548R filed a bill in the court below against the two railroad companies and the trustees, Wilson and Mitchell, to enforce the execution of the trusts of the deed. In their answer, the railroad companies averred that they had at all ANote 548R been and now were both able and ready to adjust their debt to the complainants upon a just basis of Page 86 U. By a convention assembled in North Carolina in October,an ordinance was on the 18th of that month adopted, bearing the title of "An ordinance declaring what laws and ordinances are in force, and for other purposes. The first was as follows: And whereas, in the opinion of this general assembly, no scale which will do justice to all sections of the state can be adopted, therefore.
Be it enacted that in all civil actions which may arise in courts of justice for debts contracted during the late war in which the nature of the obligation is not set forth nor the value of the property for which said debts were created is stated, it shall be admissible for either party to show on trial by affidavit or otherwise what was the consideration of the contract, and the jury in making up their verdict shall take the same into consideration and determine the value of said contract in present currency, in the particular locality in which it is to be performed, and render their verdict accordingly.
The following was one instance of several.
The ward took the bonds and stock at their par value. This was less than one year from their date. The treasurer, who countersigned these bonds, seemed never to have "understood" that they were to be charged as Confederate paper, and a subsequent treasurer stated that this view of the subject was never taken by the officers or Page 86 U. Prior to that time, ANote 548R the supervision of the president, he had submitted his printed exhibits of the condition of the company, stating their bonds as liabilities at their "face value. From this decree the defendants appealed to this Court.
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The company, in its answer, expresses a readiness to pay in legal currency the equivalent of the bonds if their values be estimated upon the assumption that the bonds were payable in Confederate notes. In support of the position ANote 548R by the company, and the trustees representing the company, reliance is placed upon the decision of this Court in Thorington v. Smith, [ Footnote 1 ] and the ordinance of North Carolina of October,relating to contracts made during the war, and the Scaling Act of ANote 548R state passed in The Treasury notes of the Confederate government were Page 86 U. Within a short period they became the principal currency in which business in its multiplied forms was there transacted.
The simplest purchase of food in the market, as well as the largest dealings of merchants, were generally made in this currency. Contracts thus made, not designed to aid the insurrectionary government, could not, therefore, without manifest injustice to the parties, be treated as invalid between them. Hence, in Thorington v.
Smith, this Court enforced a contract payable in these notes, treating them as a currency imposed upon the community by a government of irresistible force. As said in a later case, referring to this decision, "It would have been a cruel and oppressive judgment ANote 548R all the transactions of the many millions of people composing the inhabitants of the insurrectionary states for the several years of the war had been held tainted with illegality because of the use of this forced currency when those transactions were not made with reference to the insurrectionary government. When the war closed, these notes, of course, became at once valueless and ceased to be current, but contracts made upon their ANote 548R quality, and in which they were designated as dollars, existed in great numbers.
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It was at once evident that great injustice would in many cases be done to parties if the terms used were interpreted only by reference to the coinage of the United States or their ANote 548R tender notes, instead of the standard adopted by the parties. The legal standard and the conventional standard differed, and justice to the parties could only be done by allowing evidence of the sense in which they used the terms, and enforcing the contracts thus interpreted. The anomalous condition of things at the South had created in the meaning of the term "dollars" an ambiguity which only parol evidence could in many instances remove. It was therefore held in Thorington v.
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Smith, where this condition of things and the general use of Confederate notes as currency in the insurgent states were shown, that parol evidence was admissible to prove that a contract between parties in those states during the war payable in "dollars" was in fact made for the payment of Confederate dollars, the Court observing, in the light of the facts respecting the currency of the Confederate notes, which were detailed, that it seemed "hardly less than absurd to say that these dollars must be regarded as identical in kind and value with the dollars which constitute the money of the United States. This case affords, therefore, no support to the position of the appellants here, for no evidence was produced by them that payment of the bonds in Confederate Page 86 U. The ordinance of North Carolina of October,recognized the difference between the standard of value existing in that state during the war, and usually referred to in the contracts of parties, and the legal standard adopted by the government of the United States.
It required that the legislature should provide a scale of depreciation of the Confederate currency from the time of its first issue to the end of the war, and declared that all existing contracts solvable in money, whether under seal or not, made after the depreciation of that currency, before the 1st day of May,and then unfulfilled except official bonds, and penal bonds payable to the stateshould "be deemed to have been made with the understanding that they were solvable in money of the value of the said currency," but at the same time provided that it should be "competent for either of the parties to show, by parol or other relevant testimony, what the understanding was in regard to the kind of currency in which the same were solvable," and that in such case "the true understanding" should regulate the value of the contract.
The act of the legislature of the state, passed inadopted a scale of depreciation of Confederate currency as required by the ordinance, designating the value in such currency of the gold dollar on the first day of ANote 548R month, from November,to April, The ordinance and act require the courts, in the construction of contracts made in the insurgent states between certain dates, to assume as a fact that the parties intended by the term "dollars" Confederate notes, and understood that the contracts were solvable in that currency, and they thus throw upon the party contesting the truth of the assumed fact the burden of establishing a different understanding.
It is contended by the complainants that the ordinance and statute in thus giving a supposed conventional meaning to the terms used, in the absence of any evidence on the subject, instead of the meaning which otherwise would attach to the terms, impair the obligation of the contracts Page 86 U.
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